Capital Gains and Renounceable Rights
In a small win, the taxation of renounceable rights offers (in some cases) will be concessionally treated following a recent Australian Taxation Office ruling.
The taxation of rights and premiums paid to retail shareholders has improved where those shares are held on capital account.
If the shareholder is an Australian resident then there is no assessable income on the timing of the grant of the entitlement and any retail premium received, can be treated us the realisation of a CGT asset. Most years at least one large public company structure an equity deal to provide this opportunity to its shareholders – in 2016 it included Origin, in 2017 it included Boral, JB Hi-Fi, and Vocus Communications.
The right to be issued shares is a CGT asset, which if no action is taken and the resultant is sale by the company and subsequent premium is paid to the shareholder, capital gain will result. What is more significant is that the shareholder is considered to have required the rights when it acquired the original shares. There is a discount capital gain (i.e. 50%) if the shares were held for twelve months or longer.
AcctWeb
Hot Issues
- Small businesses may ‘collapse under strain of payday super’, IPA warns
- ATO’s hands tied with scrapping on-hold debts, expert says
- What Drives Your Business Growth and Profits?
- Australian Taxation Office (ATO) shifting to firmer debt collection activity
- Why employee v contractor comes down to fine print
- Sharing economy reporting regime for platform operators
- Countries producing the most solar power by gigawatt hours
- Illegal access nets $637 million
- Accessing superannuation benefits.
- Does your business have a company Power of Attorney?
- Labor tweaks stage 3 tax cuts to make room for ‘middle Australia’
- GrantConnect
- 2 in 3 SMEs benefit from instant asset write-off, survey reveals
- Updated guidance on R&D claims
- Do you know how to recover debts?
- Wheat Production by Country
- Types of small business benchmarks
- What is a Commercial Lease?
- ATO warns advisers against suspect R&D tax claims
- The year of workplace law upheaval
- How to Resolve Invoice Payment Disputes
- Raft of revenue tweaks in MYEFO to raise millions
- The Countries that Export the Most Wine in the World
Article archive
- October - December 2023
- July - September 2023
- April - June 2023
- January - March 2023
- October - December 2022
- July - September 2022
- April - June 2022
- January - March 2022
- October - December 2021
- July - September 2021
- April - June 2021
- January - March 2021
- October - December 2020
- July - September 2020
- April - June 2020
- January - March 2020
- October - December 2019
- July - September 2019
- April - June 2019
- January - March 2019
- October - December 2018
- July - September 2018
- April - June 2018
- January - March 2018
- October - December 2017
- July - September 2017
- April - June 2017
- January - March 2017
- October - December 2016
- July - September 2016
- April - June 2016
- January - March 2016
- October - December 2015
- July - September 2015
- April - June 2015
- January - March 2015
- October - December 2014
January - March 2018 archive
- Our website is really our digital office.
- ‘Substantiation will be a key focus’: ATO drums in tax time 2018 hit list
- Super changes: $1.6 million transfer balance cap and death benefit pensions
- Payroll, compliance issues top dodgy practices in Aussie business
- Employee travel expense deductions
- The Goldilocks effect - Economic and market update 4Q 17
- Tax assessments confirmed for undisclosed business income
- Super returns on the up despite clients’ hesitation
- Australia. All you need to know to be the expert.
- Business confidence hits 5-month high: NAB
- Caution advised on best interests duty with cryptocurrencies
- $20,000 asset write-off renewed for another financial year.
- SMSF compliance traps with bitcoin
- Where Australia is at. Our leading indicators.
- Foreign resident CGT withholding: early recognition of tax credit
- ATO set to doorknock as 60% of cash-heavy businesses caught
- New downsizing cap available
- Capital Gains and Renounceable Rights
- Treasury finds Australia 'increasingly uncompetitive' as US moves on tax plans
- Australia's vital statistics
- Our Advent calendar for 2017
What our clients say about us